Video Kills the Radio Star

Google decides to cut their costs, redistributing advertising funds from radio broadcasting to television and online video sharing.

In 2006 Google focused on distributing advertising funds on broadcast radio, spending a considerable amount of money on its acquisition of a radio sales network Demark Broadcasting, the purchase however was unsuccessful. Radio advertising was shown to be a less popular and a less profitable form of advertising. Google is abandoning attempts to sell ads on broadcast radio and instead are concentrating their plans to grow business through television and online video sharing.

According to the figures released last Friday by the Australian Advertising Bureau the radio industry’s advertising slump has continued in January 2009 with revenue dipping 5 percent compared to a year ago. National ad sales fell 7 percent while local sales decreased 4 percent.

“No single factor appears to be dragging down the business, but a slow automotive category is a likely contributor. Agency buyers also point to the increasing number of alternative and new media options available. While radio isn’t the only medium losing dollars to the new media, it’s being hit the hardest” says publisher from Media week Katy Bachman.

Due to recent radio figures, Google announced they are looking for a buyer for Google Radio Automation, a business designed to automate broadcast audio programming. The sale of Google Radio Automation has been a last resort for the company. Despite the devoted and substantial resources to services

“We haven’t had the impacted we hoped for”, Vice President of Product Management Susan Wojcicki.

With limited resources to be able to monitor the success of radio campaigns Google is experiencing difficulty in seeing a return on investment for this form of advertising. Online advertising however can be identified more precisely. With the implementation of Google analytics online advertising campaigns can be tracked in detail noting the number of hits per page view, how long visitors spent on each add, the number of per clicks per add and per visitor as well as the geographic location of each visitor. These figures can help mould an online advertising campaign maximising its position to reach the largest about of relevant and qualified viewers.

TV advertising can now measure audience response highlighting further to Google that radio advertising has been outdated to more proactive and monitored forms of advertising with more efficient measures on their return on investment.

Online videos and television advertising have put a damper on radio advertising. However hopefully this is only temporary. Optimistically there will be new resources developed to track and monitor broadcasts in order to bring back and revive radio advertising for Google.